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Not a Secret After All

July 8, 2008
On Friday July 4, The Guardian newspaper of London published a story (“Secret report: biofuel caused food crisis”) about a “confidential,” unpublished World Bank report it had obtained purportedly demonstrating that biofuels are responsible for 75 percent of the global rise in food prices. “The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body,” according to The Guardian.

In the story The Guardian reporter quotes a source from Oxfam, the humanitarian aid and development organization, which released its own report condemning biofuels in June. However, she does not cite a published report by the World Bank that attributes the rise in food prices to a combination of factors, including the rising price of oil, depreciation of the U.S. dollar, declining stockpiles of grains, and production of biofuels.

This official World Bank report says, “Three quarters of the increase in global maize production (emphasis mine) in the last three years went to ethanol in the US.” Translated, this means that the United States is using increased production of corn to make biofuels, not taking corn out of traditional markets for food, feed and fiber. It is not the same as saying that biofuel production accounts for three quarters of the global rise in food prices – meaning all grains, meats, poultry, etc. According to the USDA, biofuels production has not reduced exports of food or feed. U.S. corn exports reached record levels in 2007-08, and soybean exports are up as well. The U.S. livestock industry is still the top user of corn, with more corn expected to be fed to livestock in 2008 compared to 2007.

The Guardian’s story was picked up and repeated by other news organizations, even though other reporters appeared not to have actually seen the “secret” World Bank study. As Reuters noted, “Due to Friday’s Independence Day holiday in the United States the Guardian report could not immediately be confirmed.” Yet, Reuters ran the story. The Guardian then picked up the 75 percent figure as established fact in an editorial on Monday July 7.

The Wall Street Journal revealed on Monday that the World Bank report was not a secret, it was a working draft that was intended to be incorporated in a position paper released in April. "Bob Davis of the WSJ spoke with Donald Mitchell, the author of the draft report—which wasn’t secret at all, but a working paper. And like all working papers, it doesn’t reflect the official position of the World Bank."

The Guardian story is reminiscent of Time magazine’s one-sided report back in April on the indirect land-use effects of biofuel development. That article set the stage for the current media backlash against ethanol, though few reporters have ever questioned the facts of the story.